Measuring households' financial fragilities: an analysis at the intersection of income, financial wealth and debt

David Loschiavo, Federico Tullio () and Antonietta di Salvatore ()
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Federico Tullio: Bank of Italy
Antonietta di Salvatore: Bank of Italy

No 1452, Temi di discussione (Economic working papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We provide an analysis of the financial fragilities of Italian households in the 2000-2020 period, using data from the Bank of Italy's Survey on Household Income and Wealth. We comment on the recent trends of financial ill-being, using different poverty measures, and we provide a descriptive analysis of fragile households' characteristics. We then model persistence in the dynamics of the poverty statuses using different specifications of the dynamic random-effects probit model to account for the observed and latent individual heterogeneity and endogeneity of the initial conditions. A strong state dependence is found in all the poverty statuses considered, with financial and liquidity poverty being the most persistent.

Keywords: poverty persistence; state dependence; financial well-being; dynamic random-effects probit models (search for similar items in EconPapers)
JEL-codes: C23 D14 H31 (search for similar items in EconPapers)
Date: 2024-04
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:wptemi:td_1452_24

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